Markets extend gains to 3% led by Reliance

Markets extend gains to 3% led by Reliance

Mumbai: Indian shares extended gains to 3% on Wednesday afternoon, with Reliance Industries and Infosys Technologies leading as sentiment was supported by a rise in global markets.

At 2:23pm the 30-share BSE index was up 2.86% at 17,169.04 points, with all components advancing, having risen 3 percent earlier. The 50-share NSE Index was up 2.7 percent at 5,118.35.

Shares extended their gains to more than 2% in afternoon trade. At 12:19pm, the 30-share BSE index was up 2.13% at 17,048.73 points, with all components advancing. The 50-share NSE Index was up 2.2% at 5,098.50.

Leading lender State Bank of India rose 0.75 to Rs2,181.30 and ICICI Bank climbed 1.9% to Rs842, although both stocks are still down in December.

“People were expecting that RBI (Reserve Bank of India) may tighten liquidity after the inflation data. But that has not happened as yet. So the bank stocks are just recovering," said Daljeet Kohli, head of private client group at Emkay Global.

At 10:58am, the 30-share BSE Index was trading up 1.125 at 16,879.66, with only three of its components declining. It later extended gains to 1.8%. The 50-share NSE index was up 1.1% at 5,042.

“It is just bouncing back after the recent consolidation, with positive global cues helping it," said Hitesh Agrawal, head of research at Angel Broking.

“From the long-term view, we all know India is a good story," he added.

Energy giant Reliance Industries was up 1.7% at Rs1,036.30. The company said on Tuesday it had made a gas discovery in one of its exploration blocks in the Krishna Godavari basin off the country’s east coast.

“While we await the regulator’s decision on commerciality of the discovery, we believe this discovery reiterates the exploration upside potential of RIL from eastern India offshore," Goldman Sachs said in a note.

“Going into 2010, we expect more news flow to come from RIL’s other exploration blocks, as two more rigs add to RIL’s current count of three in India," the note said.

Metals stocks extended Tuesday’s gains on strong demand outlook for metals in 2010.

Tata Steel rose 1.9%, while Sterlite Industries and Hindalco climbed 2.3% and 1.4% respectively.

In the broader market, gainers were nearly four times the number of losers on a volume of 125 million shares.